Investment Analysts’ Downgrades for October, 13th (AES, AGNC, CCK, EMN, FII, HAS, IEX, ITC, JBLU, NTDOY)
The AES Corp. (NYSE:AES) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “AES Corp. continues to face unfavorable economic conditions at its Brazilian Strategic Business Unit (SBU). Apart from that stringent environmental regulations as well as political risks continue to pose challenges for the company. Moreover, the company’s focus on long-term supply contracts exposes it to commodity price risks. Also, its transmission and distribution businesses face several operational risks including breakdown, failure or damage of equipment or processes, accidents and labor disputes. On a brighter note, AES Corp. continues to streamline its portfolio through asset divestments and by exiting markets and businesses where it does not have or cannot develop a competitive advantage. Further, its efforts to expand the generation business and renewable assets could drive growth going forward.”
American Capital Agency Corp. (NASDAQ:AGNC) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “American Capital Agency continues to operate in a challenging interest rate and global economic environment. In fact, widespread volatility in the market has added to its woes and the company is anticipated to get no respite any time soon. As a result the stock price is susceptible to fluctuations. Amid this environment, though American Capital Agency continues to adjust its investment portfolio, it is expected that risk management would continue to be prioritized over incremental returns, at least in the short term. Nevertheless, the company’s acquisition of its external manager American Capital Mortgage Management is likely to lower the run-rate operating costs. Further, its share repurchase program is encouraging for shareholders.”
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Crown Holdings (NYSE:CCK) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Crown Holdings remains concerned and expects that in North American food, segment income continues to be affected by lower soup volumes and a slight delay in the early fruit pack. The company also expects income from China to decline because of the walking away from certain businesses. Pricing also remains quite challenging in China. Further, it anticipates the Middle East to persistently face challenges as several of the borders are closed and remain closed. Crown Holdings’ results will be hurt by volatile aluminum and steel prices, adverse weather condition and stiff competition. Lower production activity in Europe also remains as headwind.”
Eastman Chemical (NYSE:EMN) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Estimates for Eastman Chemical have been stable lately. Eastman Chemical is faced with significant pricing and competitive pressures, which is expected to hurt its earnings in 2016. Moreover, challenging global economic conditions are affecting demand for some of the company’s products. The company is also exposed to currency translation risk. However, Eastman Chemical remains focused on costcutting and productivity actions amid a challenging operating environment. The company is looking to reduce at least $100 million of costs by the end of 2016. Further, the company should gain from its strategic acquisitions.”
Federated Investors (NYSE:FII) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “We remain concerned about Federated’s asset under management owing to volatility in equity markets. Further, stringent regulations in the investment management business will hurt its profitability. Also, compliance-related fees are expected to continue rising in the near term. Notably, management expects compensation expenses to increase to $74 million in third-quarter 2016. Also, fee waivers for third-quarter 2016 are estimated to result in a negative pre-tax impact of $4 million.This will continue to exert pressure on the company’s earnings. However, Federated’s growth potential looks encouraging, given its diversified investment products and strategic expansion moves. Moreover, steady capital deployment activities should enhance shareholders’ value.”
Hasbro (NASDAQ:HAS) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Hasbro’s earnings and revenues have topped the Zacks Consensus Estimate in all the trailing-six quarters despite currency headwinds. The company’s efforts to establish its global presence through strategic partnerships and rapid growth in emerging markets has been driving top-and bottom line performance. Also, various sales boosting and cost saving initiatives along with regular share buybacks and dividend payments bode well. Estimates too have been stable lately ahead of Hasbro’s third quarter earnings release. Notably, the Boys segment has been posting sales growth since the start of 2014. Meanwhile, though the Girls segment marked a turnaround in the first half of 2016 after a dreadful 2015, it remains to be seen if it can sustain its performance. Also, lack of growth at some of Hasbro’s brands is a concern. Further, an increase in costs related to initiatives undertaken to boost business is likely to pressurize profits.”
IDEX Corp. (NYSE:IEX) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “With operations across five continents, IDEX’s performance is exposed to the adverse impact of macroeconomic cycles in the U.S. and international markets. In addition, the company entails huge recurring R&D expenses that increase its operating costs. This in turn reduces its price control over its products, which often lead to a loss of market share, declining top-line growth and lower operating margin.Volatility in raw material prices, foreign exchange risks and high integration costs related to acquisitions remain additional headwinds. Nevertheless, IDEX has a decent earnings history with an average positive surprise of 5.19% over the trailing four quarters, beating estimates thrice. IDEX is striving to counter the muted growth environment by improving its productivity and conducting heavy restructuring initiatives across the portfolio. IDEX also aims to exploit strategic acquisition opportunities to fuel its inorganic growth momentum.”
ITC Holdings Corp. (NYSE:ITC) was downgraded by analysts at Edward Jones from a buy rating to a hold rating.
JetBlue Airways Corp. (NASDAQ:JBLU) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “We are impressed by the renewable jet fuel purchase agreement inked by JetBlue Airways with SG Preston. The carrier's strong September traffic report is also encouraging . We are also positive on the U.S. DOT’s decision to grant final approval to eight carriers, including JetBlue, to initiate commercial flights to Havana. The approval was gained on the same day the first U.S. flight landed in Cuba in more than 50 years. The flight from Fort Lauderdale to Santa Clara was operated by JetBlue. However, we remain concerned about headwinds like the surge in terror attacks and uncertainty following Brexit, to name a few. Moreover, the company’s failure to seal the deal to buy Virgin America has dealt a blow to its expansion plans.”
Nintendo (OTCMKTS:NTDOY) was downgraded by analysts at Macquarie from an outperform rating to a neutral rating.
Superior Plus Corp. (TSE:SPB) was downgraded by analysts at TD Securities from an action list buy rating to a buy rating. The firm currently has C$14.00 price target on the stock.
Taiwan Semiconductor Manufacturing (NYSE:TSM) was downgraded by analysts at HSBC from a buy rating to a hold rating.
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